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Mobile banking use continued to rise last year as smartphone adoption grew and consumers were increasingly drawn to the convenience of mobile financial services, according to a Federal Reserve Board report,Consumers and Mobile Financial Services 2016, released on Wednesday.

The report documents consumers' use of mobile phones--Internet-enabled smartphones as well as more basic phones with limited features--as they bank and carry out financial activities. It is the Board's fifth annual look at how consumers use mobile phones to access banking services ("mobile banking"), make payments, transfer money, or pay for goods and services ("mobile payments"), and inform financial decisions, as well as their reasons for using these services.

As of November 2015, 43 percent of adults with mobile phones and bank accounts reported using mobile banking--an increase of 4 percentage points from the prior year's survey. The most common way that consumers use mobile banking is checking their account balances or recent transactions, followed by transferring money between accounts. More than half of mobile banking users received an alert from their financial institution through a text message, push notification, or e-mail--making this the third most common use of mobile banking.

For those who have adopted mobile banking, use of a mobile phone appears to complement their use of other banking channels. Among mobile banking users with smartphones, 54 percent cited the mobile channel as one of the three most important ways they interact with their bank. This share is below those that cited online (65 percent) and ATM (62 percent) as most important, but slightly above the share that cited a teller at a branch (51 percent).

Use of mobile payments continues to be less common than use of mobile banking. Twenty-four percent of all mobile phone users, and 28 percent of smartphone users, made a mobile payment in the 12 months prior to the survey. For smartphone owners who reported making payments with their phones, the most common types of mobile payments were paying bills, purchasing a physical item or digital content remotely, and paying for something in a store.

Use of mobile financial services varies across demographic groups. For particular groups of respondents to the 2015 survey--such as younger adults, Hispanics and non-Hispanic blacks--the shares who reported using mobile banking and mobile payments were higher than the overall survey averages. Smartphone ownership among those with mobile phones is higher for Hispanics than for non-Hispanic whites in this survey.

Consistent with findings from prior years, a majority of consumers using mobile banking and mobile payments cite convenience or getting a smartphone as their main reason for adoption. The main impediments to the adoption of mobile financial services continue to be a stated preference for other methods of banking and making payments, as well as concerns about security.

Concerns about the security and privacy of personal information continue to be expressed by mobile phone users, and the majority of smartphone users reported taking actions that can reduce harm in case of a security incident. The most common actions were installing updates, password-protecting the phone, and customizing privacy settings.

The survey was conducted on behalf of the Board by GfK, an online consumer research firm. The 2015 survey was conducted from November 4-23, 2015. More than 2,500 respondents completed the survey.

Previous surveys have informed the Federal Reserve and other parts of the government on consumer banking and payment behavior and have supported basic research and public discussion.